EUROPEAN COMMISSION

SMEs in FP6

Sharing in Europe’s future

Directorate-General for Research

2006 EUR 21350
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Contents

Introduction 5

SMEs in Integrated Projects 6

View from the Commission –

SMEs in life sciences and industrial technology research 9

SMEs in Networks of Excellence 10

SMEs in Specific Targeted Research Projects 12

View from the Commission –

SMEs in aeronautics, energy and environmental research 15

Specific Support Actions 16

Horizontal research activities 18

Marie Curie 21

Assistance and further information 22

The new definition of an SME 23

3
Introduction
SMEs – natural partners for international
collaboration and research
EU Framework Programmes for research offer
SMEs a fast track towards the knowledge economy
by expanding their international networks and
their ability to respond effectively to market
developments and increasing global competition.
Enterprise per se but especially SMEs must become
more flexible in the manner in which they respond
to paradigm shifts in technology and demand.
They must be able to innovate constantly in order
to remain competitive.
SMEs and EU policy objectives
SMEs represent more than 99% of Europe’s 25
million private businesses, ranging from specialist
high-technology companies to conventional firms
in traditional sectors. They account for two-thirds
of the EU’s GDP and two-thirds of its employment,
generating half of all its new jobs. Among them
are the nimble, innovative and entrepreneurial
firms that have the greatest potential for rapid
growth and knowledge transfer between sectors
and regions.
SMEs are therefore primary targets of, and
essential partners in the EU’s current strategy
for knowledge creation and growth as outlined
in the Lisbon agenda. A central component of
this strategy is the Sixth Research Framework
Programme (FP6), and the many opportunities
it offers SMEs are presented herein.
This brochure explains how SMEs can become
involved in research initiatives, describes the
dedicated assistance available to help them do
so, and provides examples of the variety of ways
in which SMEs and their trade associations are
already benefiting from their participation.
Specific measures to address
specific needs
Research-intensive SMEs play a vital role in
FP6, as they have done in earlier programmes.
Energetic and specialised, they supply key
scientific and technological inputs to many
projects. The involvement of market-oriented
technology-based SMEs is also crucial as such
firms tend to have shorter lead times than
larger companies with regard to new product
development, and are also more likely to
adapt innovative technologies to prevailing
and potential needs. Nevertheless even low- to
medium-technology SMEs need access to new
knowledge if they are to grow and prosper
as new technologies will help them achieve a
competitive edge.
FP6 aims to fund SMEs to the tune of around
€2.3 billion throughout its four-year lifespan.
At least 15% of the budget across its seven
‘thematic priorities’, adding up to about €1.865
billion, are foreseen to be assigned to SMEs.
In addition, about €470 million is allocated to
horizontal research activities for SMEs and SME
associations. Nevertheless, many small firms
be they high tech or not often find it hard to
dedicate management resources to participation
in research projects. Consequently, the
Commission has put in place a range of special
measures to further assist them.
FP6 commenced at the end of 2002, but calls
will continue to be launched until early 2006,
with ongoing opportunities for new partners to
join the various projects along the way.
The message to SMEs is simple – get involved!
5
 SMEs in Integrated Projects
Opening the door to international
competitiveness
Integrated Projects (IPs) are heavyweights of FP6,
designed to strengthen European competitiveness
and address a range of societal and environmental
challenges. Tackling complex research goals, they
have budgets counted in millions of euro and can
last up to five years. Project consortia include
organisations of many different kinds, drawn
from many countries, sectors and disciplines,
collaborating in multiple and interlocking strands
of research.
When FP6’s ‘new funding instruments’ were
unveiled, there was some concern that research-
intensive SMEs might find it more difficult to
participate in large and often complex IPs than
in the smaller, usually simpler collaborative
research projects of previous Framework
Programmes.
However, three years on, it is clear that IPs
encourage SME participation through a range
of actions – whether as suppliers of specialist
scientific or technological know-how, as
innovators, or as medium- to low-tech end-users.
In certain thematic priorities, SMEs even lead
some of the IP consortia.
Large-scale research –
open to smaller players
IPs bring together the critical mass of activities
and resources needed to achieve ambitious
but clearly defined scientific and technological
objectives on a pan-European scale. They do this
by integrating fundamental and applied research,
technological development and demonstration.
IPs also manage the dissemination, transfer and
6
development of their results, acting as a source
of innovation and technology transfer. This
involves analysis, assessment and exploitation
of technologies including training for research
and business personnel, and information and
communication activities for the wider public.
In their project proposals, IP consortia are
expected to demonstrate how they plan to
involve SMEs – for example, take-up measures
aimed at promoting early application of state-
of-the-art technologies developed in the project.
This brochure presents case studies of IPs in
the fields of aeronautics, nanotechnology, life
sciences and food safety, covering a range of
activities including technology demonstrators
and prototypes, product testing, pre-marketing
analysis and training. In each scenario, SME
partners have contributed to these activities and
benefited from their active involvement.
Unique benefits,
unique contributions
Despite their size and complexity, the many
benefits offered by IPs continue to attract large
numbers of SMEs. Some are research-led SMEs
wanting to leverage their own technological
knowledge; others are more market-led SMEs
in traditional sectors seeking new ways to build
competitiveness. The different reasons for SME
participation include:
l privileged access to leading-edge scientific
and technological expertise;
l the chance to work alongside large high-tech
firms engaged in cutting-edge research;
l exposure to pan-European networks of
research and business contacts
l first-hand opportunities to test concrete
research results in prototype, test-case and
pre-market scenarios; and
l involvement in the diffusion of results to the
market place and the public.
SMEs are also important contributors to IPs. In
some cases, research-led SMEs bring proprietary
technical know-how to an IP that is critical to its
success. Others have particular market positions
that allow them to channel results to potential
users by exploiting geographical or sectoral

networks. And, while universities and research
institutions focus on scientific objectives, SMEs
are natural channels for the evaluation of new
products and services – while their market-
oriented expertise is often critical for the
development and testing of prototypes and pilot
services.
How to get involved
An SME or a group of SMEs may also initiate an
IP proposal. In this case, they must first identify a
relevant research theme in the work programme
of one of FP6’s seven thematic priorities, for
which a call for proposals is still open or remains
to be published. They must then recruit partners
to form a consortium capable of carrying out
the project.
More often, an SME will join an existing
consortium. Partners are frequently identified
through existing scientific and commercial
networks, but the Commission operates an on-
line ‘partner search’ service to help consortia
find new partners – and potential partners to
find suitable consortia.
Direct assistance with all aspects of making a
proposal – including dedicated help for SMEs –
is available from National Contact Points (NCPs)
in Member States and Associated States.
The steps include:
l acquiring full documentation from the call-
specific page on the CORDIS FP6 service
l preparing and submitting the proposal before
the deadline, using the Commission’s secure,
web-based Electronic Proposal Submission
System (EPSS)
INTEGRATED PROJECT
CASE STUDY
Avalon – bridging gaps
in the innovation chain
In the field of industrial technologies, FP6 is
pioneering a particular type of IP that targets strong
SME participation – Integrated Projects for SMEs
(IP-SMEs). They differ from standard IPs in that an IP-
SME is led by an SME and at least half the partners
are also SMEs. In this way the R&D capacity of
research organisations can be linked to the intimate
market know-how of SMEs in specific SME-intensive
manufacturing sectors and supply chains.
The Avalon IP-SME brings together 29 European
partners – 20 SMEs, four public research institutes
and five large companies – mostly from the textile
sector. The four-year project was launched in March
2005 with a €12.4 million budget, including
€7.4 million of EU funding. Avalon aims to
develop new hybrid textiles that incorporate shape-
memory alloys. These will have a wide variety of
applications such as advanced protective clothing
and smart textiles for applications in the medical,
aerospace and automotive sectors.
Fashionable knowledge transfer
With Europe’s traditional textile sector under threat
from global competition, advanced materials can
offer a strategic response through new knowledge-
based textiles with diverse applications. “As in
other sectors, there is a big gap between basic
research and the industrial needs of SMEs in the
textile industry,” says Allessandra Monero, Avalon
technical coordinator at SME D’Appolonia S.p.A.,
Italy. D’Appolonia specialises in identifying
new technologies and then working with their
developers on production modelling and simulation
technologies, which the company then transfers to
small manufacturers. Monero continues, “IP-SME
projects are a good way to bring these two sides
of the equation together, which explains Avalon’s
high number of SME partners and their keen interest
in the possibilities for technology transfer.”
http://www.avalon-eu.org/
7
 INTEGRATED PROJECT
CASE STUDY
Bringing a high-tech
start-up to life
PACE will establish the technical and organisational l proposals are evaluated primarily on their
basis for the creation of programmable artificial relevance to the objectives of the work
cells – nano-scale chemical systems with the programme with regard to potential impacts,
potential to revolutionise large sections of scientific excellence, the quality of their
information and production technology. Norman consortia, and their capacity to achieve the
Packard of Protolife, an Italian start-up whose initial objectives. Contract negotiations for successful
business is closely linked to the project, describes proposals address all issues including the
the goal as being to create the conditions in which budget as well as technical, financial and
life can emerge. “In the same way,” he says, “the legal aspects. Once everything is in order, the
consortium has been designed to allow interactions consortium agreement can be concluded. Often
between partners to evolve spontaneously.” in this step the most significant issues relate to
the management of intellectual property rights.
Project coordinator Professor John McCaskill says that
SMEs will usually retain rights both to their own
there is a natural synergy between the 14 research
existing intellectual property and to any new
groups involved and their two industrial partners.
knowledge generated throughout the course
“Protolife needs close links to the research community
of the project. In addition, SMEs may also be
to reach its commercial goals, and at the same time
granted privileged access to certain intellectual
provides a platform for advanced scientific work by
property belonging to other partners.
steering it towards useful, functional systems. Both
l the Commission will forward a contract to the
sides benefit from the overlap between the project’s
coordinator. This is usually signed eight to
objectives and the SME’s business strategy.”
12 months after the call deadline, and work
Protolife will undertake the industrial scale- can begin immediately.
up of procedures for identifying the chemical
components of the artificial cells, and develop
intellectual property related to their implementation
and exploitation. “To fulfil our role in the project,
and to take full advantage of the opportunity it
offers us, we will have to raise significant amounts
of venture capital,” Packard explains. “Our
access to the know-how of our university partners
– and, as the company grows, to their qualified
staff – should help us to find investors.”
McCaskill is aware that, as an EU-funded project,
PACE has some unusual features. But he gives
much of the credit to FP6 itself. “We are intensely
aware of the need to go beyond traditional
institutional and disciplinary boundaries, if we are
to make new breakthrough technologies work,”
he explains. “As researchers we warmly welcome
the considerable flexibility that Integrated Projects
offer for new forms of collaboration between
companies and research institutions.” Joining a running Integrated
http://134.147.93.66/Data/PACE/Public Project
Integrated Projects are free to recruit additional
partners on the basis of open calls, using either
their original budgets or ‘top-up’ funding from the
Commission. This flexibility allows the original
consortium to pick the most suitable partners at
a time when the tasks to be carried out have
been better defined, and enables new SME
partners to benefit from a minimum contribution
of time and resources for administration.

8
View from the Commission
SMEs in life sciences and industrial technology
research
Not just for large institutional
players
The first thematic priority of FP6 targets
research into food quality and safety, life
sciences, genomics and biotechnology. These
disciplines often demand intense research at
the microbial, genetic or molecular level, with
high-tech tools, substantial budgets and long
time-scales that surpass the capabilities and
objectives of many SMEs. Unsurprisingly, it
has been a challenge for EU scientific officers
to persuade Europe’s smaller research players
to commit to these ambitious projects. But the
European Commission’s experience in tailoring
FP6 calls for proposals to meet the needs of
small, research-led companies has facilitated
greater SME involvement and learning – as
there is now a rising tide of SME participation
in large projects. “Attracting and persuading
SMEs to join large-scale or long-term efforts,
such as IPs and NoEs in life sciences or food
safety research, has not been easy, especially
at the outset of FP6,” admits Paolo Battaglia,
a planning and programming officer at the
Commission’s Research Directorate-General.
“We quickly realised that we had to change
the way we presented projects to small players
by making our calls more SME-friendly.”
Battaglia continues, “The challenge is not to
simply hand out money to SMEs for a project
they don’t really need, but to help them join
an R&D project that offers them direct benefits,
even if the project is dominated by much
larger partners.” This SME-friendly approach is
producing results. More SMEs are responding
to calls, with total funding requested by
SMEs for food safety proposals rising from
€16 million in 2003 to €21 million in 2004.
In addition, SME participation in STREPs and
Coordinated Action projects is increasing.
“We expect this to rise even more by the end
of 2005,” says Battaglia.
A favourite with SMEs
FP6’s ambitious thematic priority 3 covers
nanotechnologies, intelligent materials and
new production processes – known as NMP.
Europe’s research-led SMEs have aggressively
carved out leading roles in NMP projects –
often coordinating much larger companies and
organisations. “One of our main aims is to get
nanotechnologies and smart materials integrated
into new production processes and devices as
widely as possible,” says John Hubert Cleuren
of the European Commission’s Research DG.
“And when something concerns production
technologies, leading to commercialisation,
you really catch the attention of SMEs.”
So far, Cleuren’s unit has held three calls for
NMP proposals which produced mixed results
at first. “With our first two calls, we took a
bottom-up approach based on a generic
description of NMP industries and technologies.
This made things a bit chaotic; we had too
many proposals from SMEs that didn’t really
fit the calls’ requirements,” he recalls. “There
was a huge over-subscription regarding each
call’s budget.”
However, the quality of SME proposals began
improving in the second call and then leapt
upwards in the third call. “We had changed
our approach from bottom-up towards creating
more distinct and narrowly-defined topics,”
observes Cleuren. “This had the immediate
effect of reducing the quantity of unsuitable
proposals while boosting quality. The third call
has collected 87 SME proposals requesting
some €500 million and has proved much more
effective than earlier calls because the proposals
are better targeted to the call’s objectives.”
9
 SMEs in Networks of Excellence
Plugging into knowledge and experience

SMEs seeking technological leverage can reap

the rewards of cutting-edge research and find
new business opportunities through participating
in Europe-wide, research networks that link
researchers from R&D organisations and high-
tech companies across Europe. Such networks
offer many opportunities for coordinating scientific
and technological benefits, from the joint use of
infrastructure and research tools to technology
transfer and exchanges of personnel.

Strengthening scientific and technological

excellence on a particular research topic is
precisely the objective of the FP6 instrument
‘Networks of Excellence’ (NoE). By crossing
national borders, a NoE helps eliminate the
fragmentation of effort and resources that often
hampers specialised research in Europe.
It was hoped that Europe’s research-led SMEs
would be enthusiastic about these knowledge
networks and the leverage they can offer. But
EU officials admit it is a challenge to persuade
SMEs to join up. The main reason is one of time
horizons; NoEs are long-term undertakings,
while many SMEs have needs and objectives
that are much shorter term.
However, SMEs should not ignore Networks of
Excellence. They offer strategic advantages to
all participants by providing access to the latest
research results in their sector and by opening
doors to potential business contacts. Indeed,
because it is a virtual construct, the entry costs
to a NoE are low, while the opportunities it
offers research-intensive SMEs to network and
generate future business are rich, as the NUGO
project shows (see box on page 11).
What do NoEs do?
NoEs are not funded to conduct research – any
research carried out within a NoE is financed
by other sources, such as national or private
funds. NoEs are funded by the EU to facilitate
research in a defined area – related to any of
FP6’s seven thematic priorities – by creating a
network infrastructure for that research effort
to take place. A NoE may involve hundreds of
researchers or just a few. What counts is that
a critical mass in a given research field takes
shape. For this to happen, sustained EU support
is necessary – up to seven years, although five
years is more common.
Participants can be research groups such as
universities, technology institutes and national
organisations, or SMEs and larger enterprises.
To be eligible for FP6 support, NoEs must have
a minimum of three institutions from at least
three countries. Membership is also open to
organisations from EU candidate countries and
third countries with which the EU has signed
bilateral science and technology co-operation
agreements.

10

How does a NoE function?
The functioning of a NoE is defined in its joint
programme of activities (JPA), which is the
agreed blueprint for achieving the network’s
objectives. A JPA has three elements:
l a set of integrating activities to guide how
participants conduct work on their agreed
research topic;
l a programme of jointly executed research;
and
l activities for spreading excellence, such as
joint training programmes for researchers.
What do these mean in detail? ‘Integrating
activities’ cover, for instance, common research
tools and platforms, the joint use of research
facilities, personnel exchanges and the joint
creation and use of communication networks
and databases. Importantly so for SMEs is the
joint management of knowledge and intellectual
property generated by a NoE’s research
goals. ‘Jointly executed research’ could mean
the development of new research tools or the
generation of new research knowledge, avoiding
duplication while helping validation, which is then
made available to all NoE participants. Finally,
the concept of ‘spreading excellence’ centres on
joint programmes for training researchers and
other key staff. This is an important element for
overcoming border-related R&D fragmentation,
and Europe’s research-intensive SMEs have their
role to play here.
So for those SMEs willing to take a longer-term
perspective, Networks of Excellence can offer
truly strategic advantages. Joining a NoE will
bring rewards to small research players with the
skill and perseverance to participate to the full.
NETWORK OF EXCELLENCE
CASE STUDY
NUGO – a partnership
of niche players
Persuading SMEs to join a Network of Excellence
is not easy, as FP6 project officers at the European
Commission readily admit. By definition, NoEs
have a long-term mission to establish research
channels across Europe. In most cases, this is too
long for an SME’s needs which are more short
term, but there are exceptions, as the FP6 NoE
NUGO shows. With EU funding of €17.4 million,
NUGO is creating a virtual community of
European scientists and institutes engaged in
nutrigenomic research – the study of how food
and human genes interact and the toxicological
implications.
Among NUGO’s 22 partner organisations and
scientists scattered across nine countries is the
Dutch software firm, Topshare International
BV. Despite its small size – Topshare recently
expanded its staff of five employees to eight – the
company plays an important role in the business
operations and integration of the project as well
as the creator and manager of NUGO’s intranet,
which allows participants to post and exchange
research results in a secure environment within
the network community.
Realising the benefits
“The paperwork was a bit of a hassle, but
manageable. There’s an EU helpdesk here in our
home town and they were very helpful,” says
Martin Renkema, Topshare’s President. Topshare’s
partners in NUGO also helped ease its entry into
the project, with flexible funding arrangements.
“We’re the only partner that doesn’t get its money
in advance. So I arranged with one of NUGO’s
university participants to provide an advance to
us. That was a big incentive for us,” he recalls.
But the main benefit for Topshare is commercial.
“Our involvement as NUGO’s software developer
has expanded our customer base due to NUGO’s
network of contacts. And we get feedback from
the intranet’s 1 200 users who tell us immediately,
which parts of the software are good or bad. That
is of immense value for a small software company
because we can hone our skills and products,”
says Renkema.
http://www.nugo.org/
11
 SMEs in Specific Targeted
Research Projects
STREPs – SMEs’ favoured instrument
If there was a poll among Europe’s SMEs asking for
their favourite Framework Programme instrument,
the answer would probably be STREPs. With an
emphasis on clearly defined, focused targets and
shared-cost arrangements, Specific Targeted
Research Projects are very attractive to SMEs and
are a popular way for them to engage in EU-
funded research.
How do they work?
Lasting between 18 to 36 months, STREPs are
objective-driven, limited in scope and time, and
usually less multidisciplinary than IPs. While their
critical mass of expertise and capabilities can
be much smaller than that of an IP, what counts
is that the necessary critical mass is present to
achieve the project’s goal.
This goal can be a research and technological
development (RTD) activity, a demonstration or
innovation activity, or a combination of these.
For example, RTD activities must be well defined
with precisely focused objectives and measurable
outcomes, while innovation-related activities
centre on the protection or dissemination of
knowledge, socio-economic studies and efforts
to support the exploitation of these results.
Demonstration activities, on the other hand,
involve proving the viability of new technologies
with potential economic advantages – but which
cannot be directly commercialised.

Who is the target audience?

While any legal entity can join a STREP, the
A STREP functions as a smaller version of an most typical participants are research-oriented
Integrated Project (IP), with a few key differences. enterprises of all sizes, research institutes and
The great majority of STREPs are focused on universities. As already mentioned, many
one research objective, in contrast to the multi- participants are SMEs.
objective and more inter disciplinary approach
Accumulated experience within Framework
of IPs. This narrower scope makes it easier for
Programmes shows that the optimum size of
SMEs, with their limited resources, to manage
a STREP is between six and 15 participants.
their participation in a STREP project. Further,
A STREP’s size also depends on its research
a STREP’s budget, though sometimes large, is
usually smaller than an IP’s, and its duration is
typically three years whereas an IP may be up
to seven years.
Indeed, the lower budget of STREPs is another
reason it appeals to SMEs, explains Philippe
Schild, programme officer for new and
renewable energy sources at the European
Commission’s Research Directorate-General. “In
many cases it is easier to get SMEs to climb on
board a STREP than an IP because its budget is
lower, so the contribution required from each
participant is proportionally lower and thus
more manageable for the smaller players.”

12

area and thus the thematic priority area it falls
under. Smaller-sized STREPs are not unknown,
particularly for FP6’s thematic priority 7,
which concerns citizens and governance in
a knowledge-based society. Other groups
that have participated in STREPs include
organisations that possess specific competences
in the management, dissemination and transfer
of knowledge, and potential users and other
stakeholders with an interest in the project’s
research objectives.
How is it managed and funded?
Most STREPs receive between €0.8 million to
€3 million of EU funding; the actual average
amount varies according to the different
characteristics of the thematic priority areas.
Overall, on average, a STREP receives about
€1.9 million in funding. This funding comes in
the form of a ‘grant to the budget’, which creates
a ceiling for the EU’s contribution to each STREP.
With regard to project oversight, one special
STREP CASE STUDY
OpTag – acquiring
new technologies and
business opportunities
Increasing air passenger traffic and the arrival of
super-jumbo-sized aircraft pose great challenges
for the security and logistics of moving people
quickly on and off aircraft. Tagging and tracking
lost or suspicious luggage and passengers is an
increasingly urgent need at Europe’s airports.
The OpTag STREP aims to address this need with
new surveillance systems based on cheap chip-
and-battery technologies that can be integrated
into paper airline tickets for long-distance tracking
of passengers throughout an airport. A 36-month
project, OpTag’s total budget is €2 212 971,
including the EU’s contribution of €1 647 928.
OpTag’s SME – the 40-employee Innovision
Research & Technology plc, based in the UK
– plays a pivotal role as project coordinator
and is responsible for developing the system’s
crucial chip technology. Innovision got into the
project because of its previous experience. “We
had gained a lot of technical expertise working
with toy manufacturers in producing cheap chips
that are effective over short distances,” says Bob
Lloyd, Innovision’s coordinator for OpTag. “The
challenge with airport surveillance is to develop
‘tagging’ or tracking devices that work over
longer distances, and OpTag offers us a golden
opportunity to get into this field of technology.”
His company also has its eye on another of
OpTag’s research goals: advanced batteries. “To
track a ticket-holder over long distances you need
a power source embedded in the ticket – a flat
battery – and this is something we’re keen to learn
about because its range of applications would be
vast,” says Lloyd. “As a team, all the participants
are working together very well and we at Innovision
expect to see concrete results to show to each other
in the coming months. And that’s exciting.”
http://www-research.ge.ucl.ac.uk/
Optag/
13
 STREP CASE STUDY
Bio-Pro – attracting SMEs
to a project
requirement for STREPs is that they have, from
the outset, an agreed detailed work plan for the
whole duration of their contract. This plan can
be modified, but only with the agreement of the
Commission. Any changes to the plan should
not affect the STREP’s overall objectives and
principal deliverables. The same rules apply to
changing the number of participants in a STREP.
The consortium must get the Commission’s
approval to either replace a participant who
The FP6-funded Bio-Pro project has a green goal: has withdrawn from the project or to increase
to develop new burner technologies for low-grade the number of participants above the originally
bio-fuels as a source of clean energy for bio-refinery agreed figure.
activities. This is the kind of targeted research that
requires large-scale laboratories and test facilities.
Not surprisingly, Bio-Pro’s consortium is dominated
by universities and technical institutes, which share
the project’s total cost of €3 629 814, including
60% EU funding. Yet there are two SMEs – from
Sweden and Germany – that are partners in the
project. But bringing them into the project took
time, patience and a helping hand with regard to
the paperwork.
Roland Berger, head of Stuttgart University’s
Decentralised Energy Conversion Department
and Bio-Pro’s project manager explains: “If you
want to involve SMEs in such a project, you have
to guide them through the application forms.
They may need your help in some areas, such as
showing them how to check and track their costs
according to EU requirements.” Having gained
some experience in previous Framework projects,
Bio-Pro’s two small players “...were already
accustomed to EU procedures, so they knew what
was coming”, says Berger. “But if you have a new
SME, then there’s definitely a learning curve. As
coordinator, you have to spend the time and effort
to work with them. It has its rewards, though.
I’ve been involved in other EU projects and my
experience is that SMEs always appreciate and
capitalise on the technical benefits they get from
their involvement in a project.”
In this case, the two SMEs will benefit during the
project’s third phase when Bio-Pro’s two prototype
burners move out of the lab and on to an industrial
site for real-time operation and testing. “This is
when the technology-transfer and intellectual
property rights benefits come into play. At that
point, I expect our SMEs to strike off on their
own with commercialisation of the technology in
mind,” says Berger.
http://www.eu-projects.de/bio-pro/

14
View from the Commission
SMEs in aeronautics, energy and environmental
research
Desirable but difficult
Industry consolidation in the aeronautics sector
over the last ten years means there is now only
one large aircraft manufacturer in Europe,
Airbus Industries. To remain competitive, it
has been exerting cost pressures all along
its supply line, which means that economies
of scale favour large players in this sector.
This poses entry problems for SMEs in many
aeronautics research activities, particularly
within Integrated Projects (IPs), as Jean-Pierre
Lentz, a planning officer at the Commission’s
Research DG, explains. “If you are talking
about SMEs and aeronautics, you are talking
about upstream sub-suppliers...a long way up
the supply chain from Airbus,” says Lentz. “This
presents a problem for us regarding IPs, whose
whole rationale is to bring big and smaller
players together. Also, SMEs bring much less
input to a project than the large aeronautics
suppliers and systems integrators, so you might
need ten or 15 of them within a single project
to reach the 15% participation level for SMEs
we want to see in our projects overall.”
But he also emphasises the importance to SMEs
being involved in aeronautics R&D. “An IP
functions as a kind of pre-competitive test case
and thus prepares SMEs to enter the market
in the future through gaining experience and
exposure to the technology by working with
the prime suppliers and even Airbus itself,” he
observes. To get around the entry problem, the
Commission puts friendly pressure on industry
groups, such as the Aerospace and Defence
Industries Association, to include SMEs in
FP6 project proposals. “This has helped,”
says Lentz. “Although overall FP6 aeronautics
spending on SMEs probably won’t reach the
15% level, the trend is improving. Based on
FP5 experience, I figured would reach only
8% for FP6, but we’re already at 9% and a
little ahead of expectations in a sector that is
difficult but desirable for SMEs.”
Packed with SMEs
In contrast, FP6 projects in energy and
environmental research attract many SMEs for
two reasons: historically, small research-led
players are prevalent in both sectors and, just
as important, they’ve been quicker to exploit the
results of EU-funded research than larger institutes
and companies in the market place. “There
are many SMEs interested in the energy field,
though it depends on which sub-sector you’re
talking about,” says Philippe Schild, programme
officer for new and renewable energy sources
at the European Commission’s Research DG.
“Our renewable energies projects, such as bio-
mass and wind research, are packed with SMEs
who got into the sector early on. Ironically,
we’re now seeing many of them leave the ‘SME’
sector because they’re getting really big. But
that’s exactly the sort of success story we want
our Framework budgets to produce!”
Reaching FP6’s 15% target for SME
participation in energy and environmental
research has been a trial-and-error experience
for EU project planners, explains Per Backe-
Hansen, a Norwegian national expert who
reviews FP6 environmental technologies at
DG Research. “It’s taken us a while to get
the right proportion of funding for FP6’s
newer instruments versus the older ones. Our
experience in the environmental sector clearly
shows that SMEs prefer the specific research
objectives of a STREP to the new instruments
such as IPs and NoEs; the latter often seem
too big or too long-term for small players.”
Whereas Backe-Hansen’s unit allocated 80% of
their budget for new instruments during the first
two calls for proposals, this was scaled back to
65% for the third call. “This made it a lot easier
to attract SMEs, and we expect similar positive
results for the fourth call,” he says.
15
 Specific Support Actions
Reinforcing project outcomes

Whether large or small in scope, EU research tasks, including liaison with the Commission;
projects are not stand-alone efforts. To maximise co-ordinating knowledge-management and other
their success and positive impact on Europe’s innovation-related activities; and obtaining audit
research outcomes, complementary measures certificates by each of the participants.
are often needed. This is where FP6’s Specific
Support Actions (SSAs) play a role. Some of these
SSAs are implemented at the level of the thematic
Bridge-building activities
priorities for targeted encouragement of SME SSAs are not carried out by SME partners
participation. The ETI measures take a broader themselves. Instead, they are run by intermediary
and sectorial approach. groups with good access to dissemination routes,
such as SME National Contact Points, industrial
federations, networks or associations of research
performers, professional associations, chambers
of commerce and so on. Their responsibility
is to encourage a more innovation-friendly
environment throughout the EU, stimulate
innovation itself and help create innovative
technology-based businesses. Intermediaries do
this by:
l encouraging transnational co-operation
between SMEs;
l boosting economic and technological
intelligence;
l bringing sectoral or technological players
together dynamically via networks;
SSAs do not fund research and technological l creating or consolidating information services;
development activities. They are auxiliary and
elements, designed to capitalise on project l analysing and evaluating innovation in EU
research results and help stakeholders extract research projects.
maximum advantage from them. A budget of
The collective effect of all of the above is to
€35 million is available from FP6 for SSAs, which
create bridges between SMEs, researchers,
focus on lending support to a specific research
entrepreneurs – and investors.
theme or industrial sector. SSAs usually last from
several months up to three years, although, if
needed, they can be longer. Funding usually
amounts to several hundred thousand euros and
more is available in exceptional cases.
Specific Support Actions cover two kinds of
activities: support functions and consortium
management activities. The former comprises
activities such as organising conferences and
seminars; carrying out studies, benchmarking
and mapping exercises; monitoring activities;
disseminating data; developing research and
innovation strategies; and overseeing information
and communication campaigns. In the latter, a
consortium-management SSA would focus on
coordination of a project’s technical activities;
handling legal, financial and administrative

16

Forests and fashion
A popular way to implement a specific support
action is via an Economic and Technological
Intelligence (ETI) project. First introduced in
1999 in the EU’s Fifth Framework Programme,
a typical ETI receives between €200 000 and
€2 million of funding. An ETI project promotes
the creation of groups or ‘clusters’ of SMEs with
similar innovation needs as well as encouraging
trans-regional co-operation between small
research players and stimulating networks of
industrial incubators in order to strengthen a
sector’s competitiveness. A typical example
of how this works in practice is the Woodism
project (see case study), which acts to boost
the technical capability and competitiveness of
Europe’s forest products industry.
ETI actions support many research activities
across the thematic areas, from high-tech
hardware to more abstract fields such as
molecular biology, and a wide range of
industrial sectors. For instance, the ETI project,
Fashion Net, is boosting co-operation among
Europe’s many SMEs in the world of fashion – a
sector employing some 3 million people – to
help them address the fierce global competition
that comes from increasing free trade in textiles.
One of Fashion Net’s primary objectives is to
promote transnational activities via a network of
intermediaries and clusters of SMEs. ETIs have
a proven record of contributing positively to the
research base of European SMEs. Hundreds
of ETIs supported research and technological
development projects in FP5, and expectations
are that FP6’s Specific Support Actions will
easily match, if not surpass, this achievement.
SPECIFIC SUPPORT
ACTION CASE STUDY
Woodism – encouraging
research in forestry
industries
Europe’s forest products industry employs more
than 3 million workers scattered across very
diverse types of SME and a broad geographical
area. But the sector’s success is hindered by the
fragmentation of information on new technologies
and services that would improve the competitive
edge of individual SMEs and the sector as a whole
in a global market. The Woodism project is a
consortium of 17 consultancies, research institutes
and technology transfer specialists from 12 EU
countries that is addressing this fragmentation.
With a budget of €1 461 397, including an EU
contribution of 72%, this 36-month Economic and
Technological Intelligence (ETI) project is linking
forest-product SMEs to each other and to their
relevant research community, as well as with
other FP6-funded research projects.
Throughout Europe, many SMEs in forest-based
industries face similar problems – cutting costs,
improving products and meeting obligatory
environmental standards – but limited channels
for co-operation and communication often leaves
them searching for their own solutions to these
problems. By creating functional groupings of
SMEs, Woodism will promote cheaper and more
efficient production, development and distribution
of wood and fibre products. Linking SMEs directly
with researchers, it will improve knowledge
transfer – on products, processes, services and
markets – and store feedback in databases
accessible to all. This should lead to a dramatic
improvement in the development, exchange and
assimilation of process and business innovations.
The project is also offering a number of services to
support these goals, including technology audits
to identify SME needs and solutions; developing
overviews of FP6 projects relevant to forest-
based industries; match-making SMEs to research
projects; disseminating information across the
sector; and training SME personnel to participate
in FP6 projects.
Moreover, the Woodism project team believes
that improved innovation within the wood-based
industry will lead to increased wood use in the
construction, energy and other key sectors.
http://www.tts.fi/woodism/index.html
17
 Horizontal research activities
Specific measures for SMEs
What does FP6 offer an SME with a good
research idea but no research facilities? Or an
SME that wants to leverage its innovation potential
by working with other SMEs and research
organisations. Few small entrepreneurs have the
time to investigate these possibilities.
But there are readily available opportunities for
such activities in FP6 via its Specific Projects
for SMEs instrument. This offers two specific
schemes devoted exclusively to the needs of
SMEs – Co-operative Research and Collective
Research.
Co-operative Research
A Co-operative Research project supports SMEs
that can innovate but which have no research
facilities of their own. It brings together these
smaller players from different countries with a
specific research objective or need and then
assigns a large part of the work required to R&D
performers. A good example is the DriveSafe
project (see case study). R&D performers could
be universities, research centres or technological
institutes. They do not control the results they
produce, ownership and intellectual property
rights of the research remains exclusively with
the SMEs which contract out the work. FP6
places a strong emphasis on this kind of SME
support and has set aside about €320 million to
finance Co-operative Research activities. Typical
Co-operative projects last from one to two years
and cost between €0.5 and €2 million each.
Two kinds of activities are eligible for FP6
funding. One involves research and innovation-
18
related work in any science and technology topic
intended to improve or develop new products,
processes and services. The range of research
topics is needs driven. For example, participants
in the 24-month FP6 Co-operative Research
project known as SafeVend came up with
a seemingly obvious but bright idea to redesign
automated fruit-juice vending machines. The
goals: to prevent tampering with product quality,
to improve hygiene and to reduce energy
consumption. Given that Europe has 10 million
of these machines, SaveVend participants
estimate they can generate a market worth
€976 million and create 6 500 new jobs.
The other activities that are supported concern
consortium management. This covers all
the coordination costs related to a project:
managerial, contractual, legal, financial and
administrative.
Consortia of SMEs in a Co-operative Research
project must meet certain conditions. Their
consortium must include at least two research
performers and at least three independent
SMEs established in two EU Member States (or
countries associated with FP6).
In order for an SME to participate in the Co-
operative and Collective Research schemes, it
must conform to the SME definition described
later in this brochure. However, research
centres, research institutes, contract research
organisations or consultancy firms will not be
considered eligible SMEs for the purpose of
these schemes. Other enterprises and end-users
can join in the project but must contribute their

own costs and play no dominant role in the
project. They must also be independent from
any of the other participants.
Collective Research
FP6’s second SME-specific scheme is Collective
Research with an FP6 budget of about
€150 million. This also involves assigning
research to R&D performers. However, in this
case the benefits to SMEs are more indirect and
the participants involved in a Collective Research
project are different. The R&D performers
carry out work for industrial associations and
groupings in order to improve the overall
competitiveness of large communities of SMEs
and SME-intensive sectors.
These projects are larger and run longer than
Co-operative Research projects. Compared to
the latter, Collective Research projects run from
two to three years and cost between €2 million
and €5 million each. The Smart Foundry project
is a typical example (see case study).
As Europe-wide initiatives, these projects aim to:
l reinforce the technological basis of sectors;
l develop technological tools such as diagnostic
methods and safety equipment;
l find solutions to common challenges such as
fulfilling environmental performance criteria,
meeting regulatory requirements, achieving
workplace safety standards; and
l carry out pre-normative research to help set
European norms and standards.
CO-OPERATIVE
RESEARCH CASE
Drivesafe –
driving SMEs forward
At first sight, there appears to be little in common
between driving a car and surfing the web. But
in both cases, monitoring the eye movements
of someone behind the wheel or in front of the
computer screen provides invaluable information
about his or her performance.
Eye-tracking devices (ETDs) collect valuable
information about drivers, pilots and website
users. The FP6 Co-operative Research project,
Drivesafe, is a diverse consortium of large and
small participants which are collaborating to
develop, test, manufacture and market a highly
functional ETD that is easy to use and applicable
to different fields of interest and difficult operating
environments. A 24-month project, Drivesafe’s
total cost is €1 879 720 of which EU funding
provides €973 908.
SMEs are intimately involved in the Drivesafe
project. Helped by research performer INRIA of
France, the small German firm, Kayser Threde, is
responsible for the hardware of Drivesafe’s new
3-D device; the software for analysing the results
is being developed by another German SME,
Media Score, while the French SME, One-too,
will handle manufacturing and production issues.
The breadth of application of this device presents
significant opportunities to these and other SMEs
involved in Drivesafe’s development and testing.
Aside from working with large European high-
tech players, such as Siemens and Airbus, the
project provides them with access to new sectors,
opening up business opportunities that would
otherwise be difficult to break into.
While the ultimate beneficiaries of this project are
EU citizens who drive cars, travel in planes or
use the internet to book tickets or trips, Europe’s
multimedia industry will also benefit by using
Drivesafe’s technology to analyse the effectiveness
and usefulness of websites.
http://www.drivesafe.eu.com/index.php
19
 COLLECTIVE RESEARCH
CASE STUDY
Smart Foundry –
collective response
to a common need
Europe’s foundry industry is dominated by SMEs Collective Research activities cover research
that supply the automotive, aerospace, white and innovation-related work, consortium-
goods and other sectors. Yet it is among the least management tasks and training activities –
research and development-oriented industries. particularly the training of SME managers and
To stay competitive, it needs efficient tooling technical staff regarding the new knowledge
and improved techniques for the design and generated by the project.
manufacturing of cast components.
Do SMEs influence the kind of research
The FP6 Collective Research project Smart Foundry conducted by the R&D performers? Yes. Each
aims to help this sector by improving the overall Collective Research project includes a ‘core
competitiveness of European SME foundries and group’ of SMEs which participate in all aspects
toolmakers. The goal of this 30-month project is of the project, from its definition of the research
to develop and implement e-technology solutions programme to the dissemination of final results.
to support design and manufacturing via new While the project’s intellectual property rights
decision-support software and other computer- belong exclusively to the ‘contracting’ industrial
aided management tools. Smart Foundry will association or grouping, the core SMEs and the
pool knowledge, processes and machinery to R&D performers are able to exploit the results.
give businesses access to cutting-edge IT system
solutions. This will help consolidate and enhance
individual SMEs expertise and their competitive
edge. Budgeted at €2 144 766 with a 67%
contribution from FP6, the project is collecting and
processing information held by SMEs across Europe,
regarding the design, planning and manufacturing
of cast components, including knowledge on new
materials, processes and equipment.
This integrated approach involves four research
institutions and several industrial associations from
Germany, the UK, Spain and France. The link to
industry comes via a core group of ten ‘pioneer’ SMEs
from the four different countries. Smart Foundry will
create a valuable resource for the whole industry by
allowing companies to increase the quality of their
design decisions and thus the quality of products.
The tools will support faster decisions and reduce the
lead times required for new tooling and production
runs. This increased flexibility and responsiveness
will enable SMEs to maintain and increase their
competitiveness both now and in the future.
http://www.smartfoundry.org/

20

Marie Curie
Transfer-of-Knowledge
fellowships
What does FP6 offer an SME and how does it
help it to gain know-how by exchanging scientific
and technical personnel with organisations in
other countries? There is a scheme that operates
horizontally across Europe for the benefit of
SMEs: the Marie Curie Transfer-of-Knowledge
fellowships.
The Marie Curie Transfer of Knowledge (TOK)
scheme also benefits Europe’s SMEs. Intended
for enterprises, research organisations and
universities, these fellowships support strategic
and durable partnerships between the academic
and business worlds.
Large firms, SMEs, universities, research
institutes and international organisations are
all eligible to apply. Proposals are welcome
from all areas of scientific and technological
research of interest to EU enterprise. There are
no pre-defined priority areas.
The overall budget of a TOK project depends
on the number of participants and the amount
of recruitment or exchange that takes place.
Past funding for TOK fellowship projects has
varied between approximately €200 000 and
€1 200 000. For a good example of the benefits
flowing from a TOK fellowship exchange, see
the case study.
MARIE CURIE TOK
CASE STUDY
Transfer-of-Knowledge
fellowship aids a smaller
company
High-profile, high-tech research projects are not
always the best way to spread knowledge across
Europe. Sometimes the more effective approach
is at the micro-level via one-to-one exchanges of
scientific personnel. This is the rationale behind the
EU’s Marie Curie Actions which support research
networks, grants and fellowships. Unsurprisingly,
those SMEs that have discovered how fruitful
these exchanges can tend to turn to the funds
again and again.
One good example is DakoCytomation (Dako),
a medium-sized company in Glostrup, Denmark,
that produces antibodies and equipment for
the medical diagnostic industry. Dako has held
three Marie Curie ‘Transfer of Knowledge’ (TOK)
host fellowships, with its most recent request
being accepted in July 2005. “I had experience
with Marie Curie scholarships at my previous
workplaces so I knew exactly what they could
bring to Dako,” says Niels Foged, director of the
company’s R&D pathology department. “It took
some doing to persuade upper management to
see the opportunities, but they now fully support
the idea because they’ve seen the benefits.”
Dako posted two of its personnel to the university
hospitals of Glasgow and Oxford in the UK, in
exchange for hosting two university researchers
at Dako’s laboratories. The exchanges last two
years during which the participants’ salaries
and overhead costs are fully supported by Marie
Curie. There are clear benefits for Dako, as Foged
explains. “Dako is heavily oriented towards
product development and not clinical research.
The TOK fellowships give our guys the chance to
carry out R&D and to observe the application of
our products in a hospital environment, where it’s
normally very difficult for Dako as a supplier to
get access. These are immeasurable advantages
and worth every bit of the administrative hoops
we jump through to get the scholarships.”
21
 Assistance and further information
Plenty of information, plenty of help

There is no shortage of assistance available for l The CORDIS FP6 service includes a useful
SMEs that are considering participation in FP6, step-by-step guide for proposers and
or have already embarked on a research project. participants at http://www.cordis.lu/fp6/
Sometimes, the difficulty is to identify the most stepbystep/home.html
appropriate type of help in a particular situation.
l The CORDIS FP6 call service at
Set out below are the key on-line sources of
http://fp6.cordis.lu/fp6/calls.cfm offers
information – through which specific, personal
an overview of all open calls for proposals.
assistance can usually be accessed, too.
Would-be participants can register to receive
e-mail notifications of new calls relevant to
their area of interest.
General help
l A partner search service at
l General information about FP6,
http://fp6.cordis.lu/fp6/partners.cfm allows
its objectives, activities and results is
would-be participants to submit profiles of
available at http://www.europa.eu.int/
their own research interests and capabilities,
comm/research/fp6/
and to search the profiles posted by others
l For participants and would-be participants, in order to identify suitable partners.
comprehensive practical assistance and
l An introduction to the Electronic Proposal
advice, including all the background
Submission System (EPSS) can be found
documentation and forms required to
at http://fp6.cordis.lu/fp6/subprop.cfm
prepare a project proposal, are provided
by the CORDIS FP6 service at
http://www.cordis.lu/fp6/

22

l Enquiries related to particular priority
thematic areas can be directed to the
appropriate helpdesk. The e-mail addresses
of all the helpdesks, together with the URLs
of each priority area’s web pages, can
be found at http://www.cordis.lu/fp6/
infodesks.htm
l Local assistance, including a personal
partner search service, is available from
National Contact Points (NCPs) in
each EU Member State and Associated
State, for each of FP6’s priority thematic
areas and other programmes. A searchable
database of contact details is provided
at http://www.cordis.lu/fp6/ncp.htm
Help specifically for SMEs
l SME TechWeb, a dedicated website for
SME participants, is at http://sme.cordis.lu/
l There is also a special SME helpdesk.
Enquiries can be posted at
http://sme.cordis.lu/assistance/
sme_helpline.cfm
or sent to research-sme@cec.eu.int
l SME National Contact Points
(SME-NCPs) in each EU Member State
and Associated State are tailored to the
special requirements of SMEs. Contact
details for each SME-NCP can be found at
http://sme.cordis.lu/assistance/NCPs.cfm
The new definition
of an SME
The new European definition of an SME came
into force on 1 January 2005 raising the financial
ceiling above which an SME is no longer classified
as a small player.
To qualify as an SME, a firm has to meet four
requirements. It must:
1. be an organisation or enterprise engaged in
economic activity;
2. have fewer than 250 employees;
3. have an annual turnover of €50 million or
less, or have a balance sheet not exceeding
€43 million; and
4. be autonomous in terms of managerial
independence and the ownership of its equity.
The last of these requirements – autonomy – entails
several conditions. An SME is autonomous if:
• it owns no shares in other enterprises and vice
versa, or
• it owns less than a 25% stake in other enterprises
(and vice versa) as long as they are not linked
to each other, or
• it owns in total less than 25% of shares of linked
enterprises (and vice versa).
Other enterprises can each own between 25-50%
of an SME’s shares, provided they are not linked
to the SME. These shareholders are restricted to
certain kinds of entities, namely:
a) public investment corporations, venture capital
companies or individual venture capitalists
with stakes of less than €1.25 million;
b) universities and non-profit research centres;
c) institutional investors; and
d) autonomous local authorities with annual
budgets of less than €10 million and fewer
than 5 000 inhabitants.
Full details of the EU definition can be found at:
http://europa.eu.int/common/enterprise/
enterprise-policy/sme_definition/index_
en.htm
This also includes a user guide with practical
examples.
23
European Commission

SMEs in FP6 – Sharing in Europe’s future

Luxembourg: Office for Official Publications of the European Communities

2006 – 23 pp. – 21.0 x 29.7 cm

ISBN 92-894-9499-9